Dish Make $25.5b Bid For Sprint Nextel

Recent rumours circulating satellite TV giant Dish Network suggest that they are planning to add another high-profile name to their roster of companies, placing a $25.5 billion bid for telecommunications provider Sprint Nextel, battling against an offer already made from Japanese wireless specialists Softbank.

sprint_nextel_logoIt is easily the most high-profile proposal for a takeover put forward in several months in the industry, and is said to have been made primarily for Dish’s interest in the ‘wireless airwaves’ that Sprint could be a key part of in the USA (with the company already considered the third-largest American provider of its kind), as the market for mobile data usage grows in the country.

The breakdown of the proposal from Dish is thought to be a collective offer to Sprint shareholders at a rate of $17.3b cash and $8.2b worth of stock, claimed to in total be “…a 13% premium to the value of the existing SoftBank proposal.”

Sprint, perhaps best-known internationally for their sponsorship of the NASCAR Sprint Cup Series (formerly the NEXTEL Cup Series) in motor racing, have only announced so far that they are evaluating the offer they have received. The Sprint challenge will come up against Softbank’s offer of $20b for a 70% stake, in a move that is seen as one that may fit Sprint’s needs of mobile data service a little better, but would be a risk given the company’s lack of presence in the American market.

Dish Network’s chairman Charlie Ergen, however, is of a firm belief as to which offer is a better deal, stating: “The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal. The combined national footprints and scale will allow Dish/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services.”

He claims that the buy-out would bring a range of services under Dish’s banner, and would enable them to provide their customers with tailor-made bundles including mobile video, cell phone service, and broadband data. Recon Analytics ‘telecom analyst’ Roger Entner noted of the reasons why Dish are so eager to push through a presence in wireless services: “Ergen is a disruptive force in the telecom and TV industry. He needs to have a partner in the wireless world to make his investment in his wireless spectrum worthwhile. Dish is desperately looking for a deal.”

While there are probably plenty of lower-market suitors that would be ready for such a takeover, it is clear that Dish are looking to enter the world of mobile data at the top, but will they be able to convince Sprint Nextel that they are the right company behind an expensive transaction?

Leave a Reply


her zaman hem cepte hem webte sikiş izle